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Wednesday, January 13, 2016

Last Week’s Deal on Coal and Oregon’s RPS: Why I’m Skeptical

By Andrea Lang, Energy
Fellow

Credit: Oregon.gov

Last week,
Oregon’s two major utilities – PacifiCorp and Portland General Electric (PGE) –
came to a seemingly game-changing agreement with some environmental advocates to
support a bill that would almost completely eliminate coal from the state’s
electric grid while increasing the amount of renewable power. The proposed bill
has some laudable goals, but as more details emerge I think renewable energy advocates and
environmentalists should carefully consider where this proposal will leave us
in twenty-five years, and question whether it will actually move us beyond our
current business-as-usual projections.

There are
essentially two major pieces of the bill that utilities agreed to support last
week. First, the bill would require PacifiCorp and PGE to phase out coal by
2030. Considering Oregon currently gets around a third of its electricity from coal, phasing out coal is
critically important to reducing the state’s consumption-based emissions.
Second, the bill would expand Oregon’s existing renewable portfolio standard (RPS) from 25%
renewables by 2025 to 50% renewables by 2040.

There is no
question in my mind that getting Oregon off of coal and increasing its
renewable portfolio standard are vital steps towards reducing our state’s
carbon footprint. Nevertheless, without further information on the details of the
bill (a draft has not yet been released), I have several preliminary concerns about
the deal as it’s been reported.

1.The compromise bill does not ramp up the
RPS quickly enough, and would allow natural gas to establish an unacceptable foothold
in Oregon.

Oregon is
currently on track to meet its existing RPS, so extending and expanding this
standard are important steps towards transitioning the state to a 100%
renewable power grid. But a 50% by 2040 goal isn’t nearly ambitious enough to
achieve Oregon’s greenhouse gas emissions goals. As Oregon transitions away
from coal, natural gas plants will likely serve as the so-called “bridge fuel”
in the state. But building more natural gas infrastructure is likely to lead to
long-term reliance on fossil fuels, and not a bridge to more renewables (see
Amelia Schlusser’s blog post from this summer for more detail on the
fiction of natural gas as a bridge to more renewables). Moreover, with the specter
of California’s current massive natural gas leak looming, there is a chance that such a
leak in Oregon would offset much or all of the state’s efforts to reduce
emissions in the first place. Requiring a phase-out of coal while setting the
RPS so low only encourages more natural gas development in Oregon, and could
give natural gas a long-term foothold in the state.

2.Oregon’s transition away from coal is already
inevitable.

Although Oregon
does still get an alarming amount of its electricity from coal, the phase-out of
this carbon-intensive fuel is already inevitable under existing laws and
agreements. A 2009 law effectively prohibits construction of new
coal-fired power plants in Oregon and prohibits utilities from entering into long-term power purchase agreements for output from out-of-state
coal-fired power plants. Meanwhile, Oregon’s only existing coal-fired power
plant in Boardman is already set to be retired by 2020. And according to OPB, many of PacifiCorp’s coal-fired power plants located outside of
Oregon are projected to reach the ends of their useful lives within the next
fifteen years. Finally, compliance with the Clean Power Plan will likely
require a transition away from coal throughout the west by 2030, even without
this bill. Thus, a state bill with a coal phase-out provision is likely unnecessary
to achieve the important goal of transitioning Oregon off of coal.

As we detailed
in our Countdown to 2050: Sharpening Oregon’s Climate Action Tools report, Oregon has a history of doling out climate policy
in a piecemeal fashion. Instead of enacting a law with clear emission reduction
mandates and a comprehensive and holistic approach to achieving them, Oregon
has created a series of tenuously connected laws aimed at reducing emissions
from a limited subset of sources and sectors without taking account of how the
laws and implementing agencies might work together to reduce emissions from all
sectors. While this proposed bill will undoubtedly achieve some additional
emissions reductions and should encourage more renewable energy development in
Oregon, it is yet another example of Oregon’s piecemeal approach to addressing
climate change.

To be sure, any
action to address climate change and advance renewable energy is better than
inaction. Further, it may be that the devil is in the details with this bill,
and that the draft that ultimately goes to the legislature will contain
some provisions that alleviate some of my concerns. But, as our Countdown to
2050 report shows, Oregon can and should be doing much more to reduce
greenhouse gas emissions and increase renewable energy generation. The proposed
bill is a step in the right direction, but renewable energy supporters should
also be wary of committing to piecemeal compromises at the expense of long-term
policy shifts. By spending political capital on passing this bill, we may reduce
our chances of enacting what the state really needs: comprehensive climate
change legislation that includes enforceable greenhouse gas emission mandates.